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HomeMy WebLinkAboutLegislative Review - HR 325 and S 637 - Earthquake Insurance Affordablity ActCITY OF PALM DESERT OFFICE OF THE CITY MANAGER STAFF REPORT REQUEST: APPROVE THE PALM DESERT LEGISLATIVE REVIEW COMMITTEE'S RECOMMENDATION TO PROVIDE A LETTER OF SUPPORT FOR THE EARTHQUAKE INSURANCE AFFORDABILITY ACT (H.R. 3125 AND S. 637). SUBMITTED BY: Stephen Y. Aryan, Risk Manager DATE: February 23, 2012 CONTENTS: Recommended Letter of Support Recommendation By Minute Motion, approve the recommended letter of Support for the Earthquake Insurance Affordability Act (H.R. 3125 and S. 637) Committee Recommendation On January 31, 2012, the Palm Desert Legislative Review Committee recommended that the City Council approve a letter of support for the Earthquake Insurance Affordability Act (H.R. 3125 and S. 637). Background The Earthquake Insurance Affordability Act establishes a program to provide guarantees for debt issued by or on behalf of State catastrophe insurance programs to assist in the financial recovery from earthquakes, earthquake -induced landslides, volcanic eruptions, and tsunamis. The purposes of this Act are to establish a program: a) To promote the availability of private capital to provide liquidity and capacity to State earthquake insurance programs; and b) To expedite the payment of claims under State earthquake insurance programs and better assist the financial recovery from significant earthquakes by authorizing the Secretary of the Treasury to guarantee debt for such purposes. EIAA is simply a debt guarantee, extended only to highly qualified borrowers and is not a loan. It provides a federal guarantee of private -market, post -event debt, with the goal of making earthquake insurance to more affordable for homeowners. Staff Report: EIAA February 23, 2012 Page 2 of 2 Fiscal Analysis There is no direct fiscal impact of this bill to the City. The Congressional Budget Office has also estimated that the EIAA comes at no cost to the taxpayer. Submitted By: n Y,/Aryan; Ri"anager Approval: S. Gibson, Director of Finance CITY COUNCIL APON APPROVED / DENIED RECEIVED,_____ OTHER MEETING DATE AYES: -b e nv),) Fi -e-y 14o-(-o i NOES: NUS ABSENT: ABS'rAIN: Iv � - VERIFIED BY: Original on File with Cite i February 23, 2012 The Honorable John Campbell U.S. House of Representatives Washington, DC 20515 RE: Support for the Earthquake Insurance Affordability Act (H.R. 3125) Dear Congressman Campbell: On behalf of the City of Palm Desert, I am pleased to inform you of our support of H.R. 3125, the Earthquake Insurance Affordability Act (EIAA). Recent earthquakes in Virginia, Colorado, and Oklahoma have served as painful reminders of California's vulnerability to similar destruction. In fact, no part of California is immune from earthquakes, especially those of us who reside in the Coachella Valley, livening near the San Andreas Fault. Although eighty percent of its residents currently live on or near a fault, fewer than 10 percent of California households are covered by earthquake insurance. Californians need greater access to affordable earthquake insurance. The EIAA is a fiscally sound solution that empowers homeowners and protects taxpayers. It provides a limited guarantee that would significantly reduce insurance premiums by as much as twenty percent and allow more homeowners to afford earthquake insurance in California. Increasing the number of insured homeowners could not only reduce the risk to all taxpayers, but also protect local businesses left vulnerable after a catastrophic natural disaster, as homeowners and communities struggle to rebuild. Having insurance is key to a faster recovery. In addition, preliminary estimates by the nonpartisan Congressional Budget Office (CBO) the EIAA cost to the federal government and taxpayers is zero. Earthquake Insurance Affordability Act February 23, 2012 Page 2 of 2 California is home to two-thirds of America's earthquake risk and experts agree that a major earthquake within the next 30 years is a virtual certainty. And while we cannot prevent an earthquake, we can certainly prepare for one and the EIAA is a significant step in that direction. Sincerely, Robert A. Spiegel Mayor cc: The Honorable Barbara Boxer, U.S. Senate The Honorable Dianne Feinstein, U.S. Senate The Honorable Mary Bono Mack, U.S. House of Representatives Glenn Pomeroy, Chief Executive Officer, California Earthquake Authority Barbara deBoom, President/CEO, Palm Desert Area Chamber of Commerce City Council John M. Wohlmuth, City Manager Paul S. Gibson, Director of Finance Stephen Y. Aryan, Risk Manager February 23, 2012 The Honorable Mary Bono Mack United States House of Representatives Washington, DC 20510 RE: Support for the Earthquake Insurance Affordability Act (S. 637) Dear Congresswoman Bono Mack: On behalf of the City of Palm Desert, I am pleased to inform you of our SUPPORT of the Earthquake Insurance Affordability Act (EIAA). Recent earthquakes in Virginia, Colorado, and Oklahoma have served as painful reminders of California's vulnerability to similar destruction. In fact, no part of California is immune from earthquakes, especially those of us who reside in the Coachella Valley, livening near the San Andreas Fault. Although eighty percent of its residents currently live on or near a fault, fewer than 10 percent of California households are covered by earthquake insurance. Californians need greater access to affordable earthquake insurance. The EIAA is a fiscally sound solution that empowers homeowners and protects taxpayers. It provides a limited guarantee that would significantly reduce insurance premiums by as much as 20 percent and allow more homeowners to afford earthquake insurance in California. \ Increasing the number of insured homeowners could not only reduce the risk to all taxpayers, but also protect local businesses left vulnerable after a catastrophic natural disaster as homeowners and communities struggle to rebuild. Having insurance is key to a faster recovery. In addition, preliminary estimates by the nonpartisan Congressional Budget Office (CBO) the EIAA cost to the federal government and taxpayers is zero. Earthquake Insurance Affordability Act February 23, 2012 Page 2 of 2 California is home to two-thirds of America's earthquake risk and experts agree that a major earthquake within the next 30 years is a virtual certainty. And while we cannot prevent an earthquake, we can certainly prepare for one and the EIAA is a significant step in that direction. Sincerely, Robert A. Spiegel Mayor cc: The Honorable Barbara Boxer, U.S. Senate The Honorable Dianne Feinstein, U.S. Senate The Honorable John Campbell, U.S. House of Representatives Glenn Pomeroy, Chief Executive Officer, California Earthquake Authority Barbara deBoom, President/CEO, Palm Desert Area Chamber of Commerce City Council John M. Wohlmuth, City Manager Paul S. Gibson, Director of Finance Stephen Y. Aryan, Risk Manager February 23, 2012 The Honorable Dianne Feinstein United States Senate Washington, DC 20515 RE: Support for the Earthquake Insurance Affordability Act (H.R. 3125) Dear Senator Feinstein: On behalf of the City of Palm Desert, I am pleased to inform you of our support of H.R. 3125, the Earthquake Insurance Affordability Act (EIAA). Recent earthquakes in Virginia, Colorado, and Oklahoma have served as painful reminders of California's vulnerability to similar destruction. In fact, no part of California is immune from earthquakes, especially those of us who reside in the Coachella Valley, livening near the San Andreas Fault. Although eighty percent of its residents currently live on or near a fault, fewer than 10 percent of California households are covered by earthquake insurance. Californians need greater access to affordable earthquake insurance. The EIAA is a fiscally sound solution that empowers homeowners and protects taxpayers. It provides a limited guarantee that would significantly reduce insurance premiums by as much as twenty percent and allow more homeowners to afford earthquake insurance in California. Increasing the number of insured homeowners could not only reduce the risk to all taxpayers, but also protect local businesses left vulnerable after a catastrophic natural disaster, as homeowners and communities struggle to rebuild. Having insurance is key to a faster recovery. In addition, preliminary estimates by the nonpartisan Congressional Budget Office (CBO) the EIAA cost to the federal government and taxpayers is zero. Earthquake Insurance Affordability Act February 23, 2012 Page 2 of 2 California is home to two-thirds of America's earthquake risk and experts agree that a major earthquake within the next 30 years is a virtual certainty. And while we cannot prevent an earthquake, we can certainly prepare for one and the EIAA is a significant step in that direction. Sincerely, Robert A. Spiegel Mayor cc: The Honorable Barbara Boxer, U.S. Senate The Honorable John Campbell, U.S. House of Representatives The Honorable Mary Bono Mack, U.S. House of Representatives Glenn Pomeroy, Chief Executive Officer, California Earthquake Authority Barbara deBoom, President/CEO, Palm Desert Area Chamber of Commerce City Council John M. Wohlmuth, City Manager Paul S. Gibson, Director of Finance Stephen Y. Aryan, Risk Manager February 23, 2012 The Honorable Barbara Boxer U.S. Senate Washington, DC 20515 RE: Support for the Earthquake Insurance Affordability Act (H.R. 3125) Dear Senator Boxer: On behalf of the City of Palm Desert, I am pleased to inform you of our support of H.R. 3125, the Earthquake Insurance Affordability Act (EIAA). Recent earthquakes in Virginia, Colorado, and Oklahoma have served as painful reminders of California's vulnerability to similar destruction. In fact, no part of California is immune from earthquakes, especially those of us who reside in the Coachella Valley, livening near the San Andreas Fault. Although eighty percent of its residents currently live on or near a fault, fewer than 10 percent of California households are covered by earthquake insurance. Californians need greater access to affordable earthquake insurance. The EIAA is a fiscally sound solution that empowers homeowners and protects taxpayers. It provides a limited guarantee that would significantly reduce insurance premiums by as much as twenty percent and allow more homeowners to afford earthquake insurance in California. Increasing the number of insured homeowners could not only reduce the risk to all taxpayers, but also protect local businesses left vulnerable after a catastrophic natural disaster, as homeowners and communities struggle to rebuild. Having insurance is key to a faster recovery. In addition, preliminary estimates by the nonpartisan Congressional Budget Office (CBO) the EIAA cost to the federal government and taxpayers is zero. Earthquake Insurance Affordability Act February 23, 2012 Page 2 of 2 California is home to two-thirds of America's earthquake risk and experts agree that a major earthquake within the next 30 years is a virtual certainty. And while we cannot prevent an earthquake, we can certainly prepare for one and the EIAA is a significant step in that direction. Sincerely, Robert A. Spiegel Mayor cc: The Honorable Dianne Feinstein, U.S. Senate The Honorable John Campbell, U.S. House of Representatives The Honorable Mary Bono Mack, U.S. House of Representatives Glenn Pomeroy, Chief Executive Officer, California Earthquake Authority Barbara deBoom, President/CEO, Palm Desert Area Chamber of Commerce City Council John M. Wohlmuth, City Manager Paul S. Gibson, Director of Finance Stephen Y. Aryan, Risk Manager